If you’re applying for a personal loan, it often pays to spend a little time on a few important things before you sign on the dotted line.
It can be very easy to get a loan.
But, it can also be easy to cheat yourself out of getting the best possible personal loan if you don’t consider a few important factors first.
As you probably know, the interest rate at which you borrow money determines the amount you’ll ultimately pay back to your lender.
So in today’s post, we’re sharing three important ways you can ensure you get approved for a personal loan at the best possible interest rate.
1. Clean Up Your Credit Score
If you don’t understand what your credit score is — or how you can check and improve it — this is the first thing you should do.
Basically, all your previous financial history, from credit cards to mobile phone bills, contributes to your credit score.
This is how potential lenders can get a quick idea of whether you’re a good customer to lend money to.
If you have a poor credit score, you may find that you have to take a personal loan at a higher interest rate compared with someone who has a good credit score.
Read our quick guide to get up to speed.
2. Compare Different Providers
If you’re eligible for a loan (and improving your credit score may be the difference), then you might be tempted to take the first loan you find.
But it’s a good idea to do your research.
Different providers will offer a personal loan at different interest rates and over different terms.
Make sure you check reviews and get an overview for what they can offer you.
Comparing different lenders and brokers could save you hundreds or thousands of dollars.
And if you go through a broker, they can help you get the best deal from a range of potential lenders.
Also, be sure to assess what a given provider can offer you against your weekly budget.
Never take a loan you can’t realistically afford to pay back.
3. Secure Your Loan
Generally, you can borrow money on an unsecured or secured basis.
What that means is you may have the option to offer a property, or vehicle, as collateral for a personal loan.
By ‘securing’ your loan with an asset the lender can repossess in case you fail to repay the money, you may be able to drive the interest rate lower.
This, in turn, can help lower your weekly repayments.
We’re always ready to help you understand how personal finance could help you improve your financial situation.
We’re always ready to help you understand how personal finance could help you improve your financial situation.
It’s free to speak with us and see what’s possible.
Speak with one of our personal loan consultants today on 0800 461 228 or email us directly at info@loanplace.co.nz.
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